Summary
In the first quarter of 2010, housing finance agency (HFA) delinquencies declined for the first time since overall performance of loans began to deteriorate in the second quarter of 2008.
However, Standard & Poor's believes that declining mortgage applications for new home purchases, slower sales following the expired tax credit, more distressed home sales as a result of foreclosure, a large backlog of distressed properties that haven't been marketed for sale yet, and a high unemployment rate may further hamper home prices.
As a result, Standard & Poor's believes that default rates on HFA loans may increase again in second-quarter 2010.
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